On Wednesday, telecommunications infrastructure provider MetroNet announced that funds managed by global private equity investor KKR will join long-time partner Oak Hill Capital and company management as MetroNet investors. As part of the transaction, Oak Hill and KKR will each make new investments to help MetroNet ramp up efforts to build and connect fiber-to-the-premise (FTTP) data, television, and telephone services to U.S. homes and businesses. Price and other deal terms were not disclosed.
Earlier this year, MetroNet launched services in its 9th state as it continues to expand its fiber footprint to local communities across the country.
“We value our long-standing partnership with Oak Hill and are proud to welcome our new investors at KKR,” said MetroNet CEO John Cinelli. “The additional investments from Oak Hill and KKR will drive growth that further bridges the digital divide by providing hundreds of thousands of additional households access to world class and future proof 100 percent fiber optic services for living, learning, and connecting to each other. We look forward to maintaining our commitment to excellence in serving our customers and communities.”
MetroNet is one of the fastest-growing providers of fiber optic high-speed broadband services in the United States, and has differentiated itself with a customer service-based model and strong local presence. MetroNet delivers affordable symmetrical speeds of up to 10 Gbps to homes and businesses to underserved as well as small-town communities, and is credited with creating the largest Gigabit city in the U.S. by fully wiring the city of Lexington, Kentucky.
MetroNet notes that its existing fiber-optic infrastructure supported reliable service to its customer base over the past year, when covid-induced disruptions substantially increased the need for greater bandwidth for tele-work, school, health, and more. The company expects its network to be available to over 1 million residential households and business locations in the near future, bringing competition for these services to hundreds of communities.
Oak Hill is an experienced investor in the FTTP space and has been a partner with the MetroNet team since 2014. Other Oak Hill broadband investments to enable increased fiber access in the U.S. include Vexus Fiber, a rapidly expanding provider in Texas and surrounding states; Future Fiber Holdings in the Northeast; and Race Communications in California and surrounding states.
“We believe that reliable, high-speed access to the Internet represents a fundamental underpinning of economic growth and equal opportunity for all Americans, from small towns to big cities,” said Oak Hill partners Benjy Diesbach and Scott Baker. “We are excited to build upon our seven year partnership with MetroNet’s outstanding management team, led by John Cinelli, as the company expands its fiber network to many more underserved American communities.”
KKR will invest in MetroNet through its global infrastructure strategy. Established in 2008, KKR’s global infrastructure strategy has since grown to become one of the most active infrastructure investors around the world, currently managing over $27 billion in infrastructure assets. KKR has significant experience investing in the growth of leading FTTP providers globally, including FiberCop in Italy, Hyperoptic in the U.K. and Deutsche Glasfaser in Germany. Most recently, KKR announced the creation of independent open access wholesale fiber optic network companies in both Chile and in the Netherlands.
“MetroNet has set itself apart as the leading independent FTTP provider in the U.S., well-known for its high quality technology, exceptional customer service and local operations,” said Waldemar Szlezak, a senior leader on KKR’s infrastructure investment team. “We are thrilled to be supporting MetroNet, alongside Oak Hill, on its mission to deliver much-needed broadband access across the U.S., a market that is well behind its peers in FTTP connectivity.”
Earlier this month, Oak Hill Capital acquired the Ontario & Trumansburg Telephone Companies (OTTC), which along with its subsidiaries, is the largest-independently owned telephone company in New York state. Oak Hill had previously acquired an OTTC subsidiary, Finger Lakes Technologies Group, which had successfully built a 3,000 mile fiber network across upstate New York to serve the region’s enterprise customers.
